Christmas season has arrived. And for homeowners, that means it's time to break out the decorations and light up the house to show your spirit. But how do you keep the house looking festive without breaking the bank with your electric bill?

As with most cost-saving plans, the one for Christmas lighting relies on a few smart investments, some hands-on work and a little creativity. "It's all about getting that traditional feel and evoking warmth without breaking the bank," says Hillary Zody, marketing director at Christmas Lights Etc., in Alpharetta, Ga.

Getting started

The first step most lighting and decorating experts recommend is to switch to light-emitting diodes. LED strands cost roughly three times what traditional incandescent strands go for, but the power-bill savings can add up quickly, especially for large, outdoor displays. "If you're starting from scratch, it's a no-brainer to go with LEDs," Zody says. "Even if you have traditional strands, switching will pay off in just a few years."

That's because a typical C9 LED bulb needs about 1 watt, which is seven times less than the same-size incandescent bulb, says Jordan Brooks, a sales engineer at Environmental Lights.com in San Diego. If you run a 50-bulb strand of the LED lights for 100 hours, it would consume 5 kilowatt-hours of power versus 35 kilowatt-hours with the regular bulbs. At 12 cents per kilowatt-hour, that's almost $3.60 per strand off your bill.

That might not sound like much, but some of the larger outside displays -- the ones you see on the news -- have upward of 10,000 lights blazing for close to 300 hours each season, Zody says. That's 1,000 strands and a savings of $3,600 per 100 hours.

The bonuses to using LEDs

White LEDs have the reputation of throwing off a blue-ish tint, a factor that has long bugged traditionalists. "In the early days, that was a big concern," Brooks says. "Now we can dial in the exact color you want."

Christmas Lights Etc. and most major retailers now sell "warm white" LED strands that Zody says come darn close to approximating the feel of incandescent bulbs. "It's not identical, but you'd have to be very sensitive," she says.

LED strands can be linked into much larger strings because of the lower power requirements, reducing the risk of blowing a circuit and avoiding a tangle of extension cords. "You can get 45 LED strands in one row, but incandescents can't go more than three," Brooks says. At roughly 23 feet per strand, LEDs strung together can reach 1,000 feet.

If the upfront costs seem prohibitive, go for less popular colors, Zody says. The "warm white" strands cost the most and red bulbs typically the least. The LEDs also have advantages in maintenance, safety and durability. The plastic LED lights break less easily than glass bulbs. They remain cool to the touch, reducing the risk of fire. And they last longer. Consumer Reports put LEDs up against standard lights and found LEDs lasted about 4,000 hours -- that's 667 days if you power them six hours a day -- while at least one bulb failed on incandescent strands in less than half that time.

Timing is everything

LED lights still cost money to run, and being smart about when you light them can lead to savings. Kathleen Neave, who runs a professional holiday decorating service in Stamford, Conn., says her clients get preset timers to operate the massive outdoor displays her company installs. They switch on at 5 p.m. and shut off five hours later. "We encourage people to use the power wisely," she says. "There's no need to light the neighborhood after most people go to bed."

If you save two hours of operation each for of the roughly 40 days between Thanksgiving and New Year's, those 80 hours add up to roughly $1 in savings per 100-watt strand. Many timers cost less than $20, and some LED strands even come with timers built in.

Convenience fees

As with most products that sell on convenience, ancillary perks add to the cost. That's true for pre-lit artificial trees, which Zody says have become increasingly popular. "It saves time and energy, (and) you're not fighting with strands of lights for hours," she says. String your own tree, though, and cut the cost. An artificial 5 ½-foot Vermont White Spruce at tree grower Balsam Hill runs $100 to $190 less without lights.

Zody recommends folks on a budget stay away from fancy products such as light nets for bushes or icicle strands for eaves. "Buy regular strands, and string them yourself," she says. Time saves money, in this case.

Battery-powered

If the power bill is your primary target, then switching to some battery-operated items, such as window candles or door wreaths, can help. The AA batteries might run a few bucks, but Neave says the products she uses shouldn't need replacement batteries in any single season. For the long term, spring for rechargeable batteries, and use the same set year after year.

Of course the cheapest way to cut costs is to string fewer lights. Unlit displays such as inflatable Santas and reindeer abound on Christmas retail sites, giving homeowners options to create festive lawns and displays without boosting their power bills.

But cutting back is an abomination to light enthusiasts such as Robert Hosier of Baltimore. His house is in the center of the city's famous "Miracle on 34th Street" light spectacular. "People ask me every year how much I spend," Hosier says. "I never tell 'em, because it doesn't matter. It's Christmas."